Question 377.— A bank holds an insurance policy for $5,000 upon the life of a customer (properly assigned to it and acknowledged by the company) as security for advances. The customer fails owing the bank $3,000, and the premiums are subsequently kept paid up by the bank, otherwise the policy would be lost. The insolvent dies before his estate is finally wound up, and the assignee, who has knowledge of the bank's security, claims on behalf of the estate the $2,000 resulting from payment of the policy over and above the bank's claim. Could the bank be compelled to surrender the money to him ?

Answer.—So long as the bank holds the policy as security only, and has not foreclosed the rights of the creditor or his assignee, or obtained a release of their interest in the policy by other proper means, it is bound to account for any surplus. Any premiums the bank pays to keep the policy alive would, of course, be added to its claim on the policy.